Future of TV Mindshare

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This is part of Mindshare's ongoing Future Of... research programme which explores the development of the media and technological landscape, and assesses the likely impact on advertisers and media businesses.

Transcript of Future of TV Mindshare

  • 1.THEFUTUREOF TV 1

2. Sir Martin Sorrell Peter BazelgetteClaire EndersWeve talked to a Mark Thompson David ElsteinDaniel Eklot of peopleAlan Yentob Steve Ballmer Mathew HorsmanTroyEsther DysonJames Surowiecki 2 3. > 4 trends shaping the UK TV market Strong linearSocial media TV brands will will fuel theprosper blockbuster. Pay will re-The TV ad shape the TVmodel will industry change butslowly. 3 4. > 4 trends shaping the UK TV market Strong linearSocial media TV brands will will fuel theprosper blockbuster. Pay will re-The TV ad shape the TVmodel will industry change butslowly. 4 5. > Strong linear TV brands will prosper Time Use, 2010TVWe love TV.Over 4 hours a dayspent watching TV.5 6. > Strong linear TV brands will prosperTV viewing hasnt changed over last 20 years.In fact, hours viewing has increased over the last couple of years.6 7. > Strong linear TV brands will prosper UK LAUNCHNo of years to reach 50% penetration MobilesBut the pace of1986 1988MultichannelTV 1514Traditional AVtechnological1975 1923VCRs Radio 1214adoption has 1986 CD Players 12 1967Colour TV10quickened20023G 10 2001DAB10 2001 DTRs9 2001HDTV 9 Digital AV 2000Broadband7 1998 Digital TV 7 1997 DVDs6 1999 Audio on PC6 2005 TV on PC 4Web content 2006Social Media4Source: O&O 8. > Strong linear TV brands will prosper Sky + timeshifted viewing by years We have over- of ownership (%)estimated our appetite% timeshifted viewing 30for new ways of 25 watching TV (self- 2016 1617 17scheduling)15 15Sky+ usage is 15-20% on average 10significantly less than 30%+ that was5 predicted. No evidence of greater0 use over time.12 3 45+Number of Years of Sky+ OwnershipSource: SkyView8 9. > Strong linear TV brands will prosper & the significance ofonline video viewing 19 mins a day of online video, but 80%+ is porn + YouTube (UGC) - neither of which is likely to become mainstream. 56% of all online video viewing is porn Source: Comscore 9 10. > Strong linear TV brands will prosper Estimated video viewing by type 2010-2020 (f), minutes 281 25940 Online Video1970% of video viewing 2 14 29 TV VOD31% will still be to linear TV 19 DTR timeshiftNon-linear viewing will nearlytreble to 90mins pd, but viewing toLive 223the linear schedule will remain193 dominant. 2010 2020Source: BARB / Comscore / Mindshare estimates 10 11. As content choiceincreases, channelbrands navigation role will be more important 12. > Strong linear TV brands will prosperStrong channel brands will gain share in a VoD world.Distribution of revenue traditional vs emerging media.Revenue The big headThe Long TailThe sagging middleTop Bottom12 13. > 4 trends shaping the UK TV market Strong linearSocial media TV brands will will fuel theprosper blockbuster. Pay will re-The TV ad shape the TVmodel will industry change butslowly.13 14. > Social media will fuel the blockbusterBlockbuster content has heldTV Viewing Figures by rank (% change 2000 2010 )up well in the digital era 0 UK -5US*The top 5 programmes have lost fewer -10viewers over the past 10 years than therest of the top 100-15 -20 -25 -30 -351-5 11- 21- 31- 41- 51- 61- 71- 81- 91-15 25 35 45 55 65 75 85 95 Source: BARB / Nielsen14 * 2001-09 15. > Social media will fuel the blockbusterNew forms ofaccess help Broadcaster player on device Online aggregatormaintain theviewer-programmerelationshipVOD & onlineTV platform player TV platform web playervideo allowadditionalopportunities toview Broadcaster site Aggregator player on device 15 16. > Social media will fuel the blockbusterSocial mediachatter helpsbig content getbigger 16 17. > Social media will fuel the blockbusterSecondscreenconsumptionis the driverof Social TV 17 18. Socialcommunitiesprovide readyfanbase forlaunchingcontent18 19. > Social media will fuel the blockbuster Social features enhance the viewer experience to sustain viewing 19 20. > 4 trends shaping the UK TV market Strong linearSocial media TV brands will will fuel theprosper blockbuster. Pay will re-The TV ad shape the TVmodel will industry change butslowly.20 21. > Pay will re-shape the TV industryTV Industry Revenue (m)2004-2010 Subscription is already 5000 Subscriptionthe dominant source4000of TV fundingAdvertising 3000Subscription has risen by c6%pa+ BBC Licence Fee (TV)over last five years, whereas 2000advertising has fallen by c2%pa 1000 Other 02004 2005 2006 2007 2008 2009 2010 Source: Ofcom21 22. > Pay will re-shape the TV industryThe value of a subscriberSky Annual ARPU () 2006-2010continues to grow541 5508.2%492Added TV functionality (PVRs, HD etc)500444and triple-play bundling have increased450421the value of a subscriber. 394 400 350 300 250 200620072008 2009 2010Source: BSkyB company reports, Dec year end22 23. > Pay will re-shape the TV industrymaking content thatLikelihood of subscribing to Pay TV if ITVscontent migrated to Paydrives penetration(% agreement, non-Pay HHs)increasingly valuableITV Digital 4 7 11If moved to Pay, ITVs content coulddrive significant Pay penetrationAll ITV61824 Much more likely More LikelySource: GfK / BoA Merrill Lynch Global Research 2010 23 24. > Pay will re-shape the TV industry Estimated Revenue mix for ITV Wholesale model (m, 2008-2015E)Also offering morediverse income for ITV3,0002,500OtherPay TV operators likely to pay2,000Contentstrategic premium for ITV content 1,500 Subscription1,000ML estimate 200m pa revenue 500Ad Revenuesupside by 2016 02008 2009 2010 2011 2012 2013 2014 2015 Source: GfK / BoA Merrill Lynch Global Research 201024 25. > Pay will re-shape the TV industryThe ARPU holewill start to be Where is the pay- lite TV model?filled inOver-the-top access throughconnected TVs & YouView willhelp growth of pay-lite25 26. > 4 trends shaping the UK TV market Strong linearSocial media TV brands will will fuel theprosper blockbuster. Pay will re-The TV ad shape the TVmodel will industry change butslowly.26 27. > The TV ad model will change but slowly TV industry revenue bn, real terms 2009 -2020 (f)1217100Other 6% 10%Public Funds (BBC)23%17% 24% 80Spot Advertising30% Subscriptions41%49% Content5 15Addressable 20102020 (f)2020(f)The TV ad marketAdvertising will become a smaller source of revenuefor the TV industry. New advertising revenuewill evolve slowlystreams will be constrained.27 28. Advertisers will become increasingly involved throughout the value chain 29. > The TV ad model will change but slowlyContent funding will grow but within limitsChallengesTransaction costsSuitability (genre / advertiser)Risk for advertiserDemonstration of ROI 30. > The TV ad model will change but slowly Addressable advertising is the bigger opportunity Price comparison site Car executionPlatformEg DemographicsViewing habits Pre roll / ITV (VOD / Linear) owned datalinear breakStated preferences Car insurance up for renewalHome insurance up for renewal 3rd PartyEg Experianintegrated data Pre roll / ITV (VOD / Linear)linear break Price comparison site Home execution 31. > The TV ad model will change but slowly But a combination of factors will constrain the growth of addressableadvertisingProductionMessaging- Creating tailored TV content cost - Tailoring messaging across multiplesegmentsefficiently Creative- Speed of production - How explicit should understanding ofpast behaviour be?ImplementationTargeting - Market power ofData- Balancing mass reach with platform owners Tradingprecision targeting Analysis - Integration of data- Ability to select targets & across platforms messaging dynamically 32. > 4 trends shaping the UK TV market Strong linearSocial media TV brands will will fuel theprosper blockbuster. Pay will re-The TV ad shape the TVmodel will industry change butslowly.32 33. Thanks 33